The Insurer sought a declaration that it had no duty to defend the Insured against an action in which the plaintiff alleged that a negligently loaded ladder flew off of a truck, causing him injury. The Court held that the loading of the ladder constituted a use or operation of an automobile, such that it came within the ambit of a motor vehicle liability policy, and was therefore excluded in accordance with an exclusionary clause of the commercial general liability policy.

Cumis General Insurance Co. v. 1319273 Ontario Ltd., [2006] O.J. No. 4668, Ontario Superior Court

The CGL Policy at issue provided that CUMIS, the Insurer, would “pay on behalf of the Insured all sums which the Insured shall become legally obligated to pay as compensatory damages because of bodily injury”. This coverage was subject to the Policy’s exclusion clauses, one of which stated that injury or damage arising out of the ownership, use or operation by or on behalf of any insured of any automobile, or to which any motor vehicle liability policy is in effect or required by law to be in effect, is excluded. The Insured argued that the facts of the case were analogous to those in Derksen v. 539939 Ontario Ltd., [2001] 3 S.C.R. 398. The Court in that case held that there were two concurrent causes of action – one relating to work site cleanup and one to the operation of a truck. The Court rejected this analogy, finding that Derksen was a “failure to load” case, whereas the case at bar involved the failure to secure. The Insured also argued that because the Policy’s watercraft exclusion and aircraft exclusion contained the words “loading or unloading” in addition to “use and operation”, “use and operation” by virtue of the interpretative tool of expressio unius, did not include loading or unloading. The Court found some merit in this argument of interpretation. However, the Court concluded that the clause excluding coverage for bodily injury with respect to which any motor vehicle liability policy is in effect or is required by law to be in effect was determinative, and excluded coverage. The Court found that there was authority holding that the loading or unloading of a vehicle fell within the phrase “use or operation” of an automobile, and as such, would fall under the terms of a motor vehicle liability policy that is in effect or is required by law to be in effect. The Insurer, therefore, did not owe the Insured a duty to defend.

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